April 23, 2008

Asia Grain Outlook on Wednesday: Soy set to rise further on bullish crude

Soybean prices may rise during the week tracking the strong rally in crude oil prices and on funds returning to the grains complex as food concerns heighten.

Soybean futures soared to one-week highs on the Chicago Board of Trade overnight, rallying on demand, technical buying and outside market influences such as strong crude oil prices and weaker equities.

May soybeans settled 59 1/4 cents higher at US$13.74 3/4 a bushel, July finished 59 cents stronger at US$13.89 1/2 a bushel, while November ended 41 1/2 cents higher at US$12.77 a bushel. July soymeal settled US$18.40 higher at US$359.70 per tonne. July soybean oil finished 1.98 cents stronger at 61.70 cents per pound.

Following CBOT's lead, China's soybean futures traded on the Dalian Commodity Exchange settled higher Wednesday. The benchmark January 2009 soybean contract settled RMB68 higher, or up 1.6%, at RMB4,209 a metric tonne, after trading in the RMB4,189-4,249/tonne range.

Threats of a strike May 2 by soybean farmers in Argentina, if the government doesn't offer concrete concessions on grain exports, and possible planting delays in the U.S. have helped fuel supply concerns.